Judge Dismisses Baltimore Suit Against Wells Fargo

Posted by Orb Staff on January 07, 2010 No Comments
Categories : Residential Mortgage

U.S. District Judge J. Frederick Motz of Maryland has granted Wells Fargo's motion to dismiss the lawsuit that the City of Baltimore initiated against Wells Fargo in 2008 alleging that Wells Fargo's lending practices led to foreclosures that harmed the city.

‘From the beginning, we have consistently maintained that Baltimore's economic problems could not be attributed to the small number of foreclosures Wells Fargo has done in Baltimore,’ said Cara Heiden, co-president of Wells Fargo Home Mortgage.

Motz's decision is consistent with similar cases that have been brought against lenders in Birmingham, Ala., and Cleveland that also have been dismissed, a Wells Fargo press statement notes.

In his memorandum opinion, Motz called the connection between Wells Fargo's alleged predatory lending and the city's financial damages ‘implausible.’ Motz placed blame on Baltimore's high unemployment rate, ‘lack of educational opportunity,’ widespread drug use and violence.

The city can file a more limited complaint by Feb. 3, according to Baltimore Sun report.

Last week, the City of Memphis and Shelby County, Tenn., launched similar allegations against the lender in a federal lawsuit. According to that suit, Wells Fargo participated in reverse redlining, selling unsustainable and high-cost loans to minority borrowers. The suit claims the loans have led to a high concentration of foreclosures, resulting in "extreme blighting, vacancies, reduced property values and lower tax revenues."

SOURCE: Wells Fargo

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